In addition to its World Wide Web site, New York City-based Kaplan Educational Centers maintains sites on America Online and the Microsoft Network. Chief executive Jonathan Grayer headed up the push to go online in 1994, establishing sites that direct-market, elicit customer feedback on test formats and new products, and distribute test-preparation software and campus guides on CD-ROM. Despite the diversity of Kaplan's offerings, Grayer says the online ventures of the test-preparation enterprise have yet to show a profit.

Why does the company bother to make the investment in so many online sites? "We can't afford to be behind the curve. Our customers are buying confidence--the ability to walk into a test feeling good. If we're in the business of selling confidence, part of building that confidence is having customers feel that we keep them out in front in educational and technological developments."